Brent crude futures fell 2% to below $62 a barrel on Tuesday, marking their lowest level in five months, as traders reacted to signs of a widening global supply surplus.
The International Energy Agency (IEA) in its latest market report raised forecasts for oil supply growth to 3 million barrels per day this year and 2.4 million in 2026, pointing to higher OPEC+ output and continued strength from producers across the Americas.
At the same time, the agency trimmed its projections for demand growth to just 700,000 barrels per day for both years, a sharp slowdown compared to recent trends.
The new estimates have reinforced expectations that global inventories will swell in the coming months. Stock builds are already being reported in major consuming nations such as China and the United States, suggesting that supply is outpacing consumption.
Adding to the pressure, renewed US-China trade tensions have weakened market sentiment and dampened risk appetite, pushing investors away from commodities.
The latest trade friction, combined with concerns about slowing global growth, has heightened expectations that energy demand will remain subdued.
OPEC’s own assessment released earlier this week painted a more optimistic picture, projecting demand growth of about 1.3 million barrels per day in 2025. However, traders appear to be giving greater weight to the IEA’s warning of oversupply and rising inventories.
With prices now at their lowest since May, analysts say the market is moving into a new phase of adjustment, one defined by slower demand, ample supply, and growing uncertainty about how quickly consumption can recover.
